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Commentary: Dealing with KPNQwest

Enterprises and vendors should activate contingency plans now that the company has filed for bankruptcy in the Netherlands and other European countries.

    By Eric Paulak, Gartner Analyst

    Enterprises and vendors should activate short- and long-term contingency plans now that KPNQwest has filed for bankruptcy in the Netherlands and other European countries.

    See news story:
    Telecom woes weigh on Europe's Web
    KPNQwest is still trying to sell a substantial part of the KPNQwest Group and had said a deal would likely not happen in less than three to five weeks. Its earlier hope of selling some non-critical assets to raise immediate working capital failed. KPNQwest still has enough customers to make its business attractive to any operator able to assume its debt burden. Negotiations for a sale continue.

    The day before KPNQwest announced it was applying for bankruptcy protection, it formally warned customers "to put in place contingency plans with other providers in the event of a significant deterioration in the performance of the KPNQwest EuroRings network." In this deteriorating situation, Gartner recommends that KPNQwest customers take the following steps:

    • Strongly consider not signing up for new KPNQwest services until its financial condition improves.

    • For all Web sites hosted by KPNQwest, start duplicating all data and look for alternative hosts.

    • Do not plan any network migrations over the next week. If KPNQwest shuts down, the IP traffic it carries--which is 25 percent to 30 percent of the total in Europe--will go to other networks and will cause some congestion.

    • For voice services, revert to using the prefix dial codes for carrier identification, either by re-programming the PBX or by advising users at the desktop. The codes may have been superseded by carrier pre-select, but the codes still work. Obtain the codes and pass them to users.

    • Enterprises using a second Internet service provider (ISP) should consider using it for Internet access needs as well as for WAN (wide area network) needs by deploying a Virtual Private Network (VPN). They should turn on the IPSec VPN feature in their firewall.

    • Enterprises without an alternative ISP should order services based on ISDN (Integrated Services Digital Network) for key locations as a dial-up, backup solution. These will take a couple of weeks to install.

    • Enterprises with banks of unused modems should reactivate them and enable overnight dialing from branch offices.

    • Enterprises reduced to dial-up should use messenger services for bulk data transfers.

    KPNQwest customers should also pull together a formal request for proposal to plan for a more organized migration away from the provider if that is needed.

    (For a related commentary on troubled telecoms, see gartner.com.)

    Entire contents, Copyright © 2002 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.